Business Models, Strategies, Issues and Trends
13 Digital deliverance? Electronic paper and e-readers
Summary Distribution and printing represent the most expensive part of producing the print version of a newspaper, accounting for at least 60 percent of costs, and often up to 70 percent. News consumers are turning increasingly to mobile devices to stay on top of events. Could new electronic reading devices such as Amazon’s Kindle help reinvigorate the news industry by reducing production costs and satisfying readers’ demands for convenient distribution models. This chapter focuses on issues related to e-readers and the effects this form of electronic distribution may have on journalism. The world’s largest newspaper printing plant, owned by News Corporation’s UK arm, News International, started production in March 2008 in Broxbourne, north of London. It is larger than 20 football fields and can produce 3.2 million news- papers a night. Most of the national titles in the UK have purchased new presses in the past three to five years or use the Broxbourne site. The plant, plus two other new presses built by Rupert Murdoch’s UK unit, cost around $1billion. The cost of a printing press tends to be amortized over 30 years, so the money News Corporation spent works out at more than $30 million a year, not counting interest charges. By comparison, the cost of hosting a major web site that transfers a few hundred gigabytes of data a day is negligible. Distribution costs for online editions of newspapers are almost zero. But as earlier chapters have explained, revenue from online advertising has not grown enough to...
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